IOC, along with its unit Chennai Petroleum, controls about a third of India's five million-barrels-per-day (bpd) refining capacity.
Vaidya said refinery runs have declined to about 75% from 93% in early July on low fuel demand.
He said the operations are expected to remain at 70%-75% for the remainder of the fiscal year through March 2021.
"It is very difficult to predict... We don't expect demand to recover to pre-COVID levels in the near future," he said, adding the company could raise refinery runs to 90% if demand recovers.
Indian refiners are cutting crude processing and shutting units for maintenance as local fuel demand falls and global refining margins are weak, company officials said.
Vaidya said IOC has shut its 300,000 bpd Pardip refinery on the east coast for maintenance and has plans to shut some units its 274,000-bpd Koyali refinery in the west for repairs this fiscal year.
Indian refiners are also reducing run rates as the export market is not attractive and rising fuel exports from China are likely to increase the pressure on Asian refining margins.
On Friday IOC reported a 47% decline in its June quarter profit as lockdowns hammered fuel demand and squeezed its refining margins to minus $1.98 per barrel.
Vaidya hoped oil prices would stay at around $40 per barrel in the second half of 2020. He also said to boost revenue IOC would look at maximising petrochemicals production at its refineries.
By Nidhi Verma and Sachin Ravikumar
